Between inflation and new borrowing caps, college students are facing severe budget gaps — and turning to credit cards for essentials like groceries and gas Kayla Hill finds that she’s reaching for her credit card a lot more lately. Sometimes it’s for one-time expenses, like an unexpected dental procedure that costs several hundred dollars. But more often, it’s for everyday purchases that are getting more pricey, like paying $20 more for a tank of gas for her Nissan Sentra than she paid at the beginning of the year.
The junior at Morgan State University in Baltimore has been occasionally delivering food for DoorDash while she looks for steadier income, either through a work-study job at her school or “just a regular grocery-store job,” she said. In the meantime, she’s accrued more than $5,000 in debt across three credit cards, even though her entire tuition is covered by scholarships and loans. She worries that her high utilization rate could hurt her credit score, which is “connected to quite literally everything else I would want to do,” she said, like the interest rate on a future car loan.
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Hill is part of a growing group of college students relying on credit cards to make ends meet. Credit-card use among undergraduates jumped to 54% in 2025, from 43% in 2018, according to the nonprofit higher-education research firm Trellis Strategies. Nearly 9 out of every 10 students who used credit cards reported doing so to pay for basic living expenses such as food, housing and gas. **New American Playbook:**New rules for a new generation — and its money Years of rising living and college costs have left many with little room in their budgets.
Now, new caps on federal student loans could put additional pressure on students to turn to high-interest credit cards to cover their daily expenses. **Don’t Short Yourself:**My plan to pay off $7,500 in credit-card debt can work for you “Our data doesn’t show that these students are being irresponsible. Students are largely paying on time,” said Allyson Cornett, Trellis Strategies research director. Inflation and new federal loan caps are turning more college students toward credit cards The average credit-card balance for college students was $2,100 in the first quarter of 2025, according to a WalletHub study — a 5.5% increase from $1,900 a year earlier.
Higher prices continue to squeeze students’ budgets. Food prices were up 2.7% in August from a year earlier, while medical-care costs rose 1.6%. The average tank of gas cost about $60 to fill in early October, up from $43 a year earlier, according to GasBuddy. **By the numbers:**From $6 eggs to $50,000 cars, these charts show how inflation has defined the past 5 years The cost of college itself has also risen.
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